Heat or Eat: The Expenditure Implications of the LIHEAP Program in Low-Income households

Abstract

The “Heat or Eat” dilemma postulates that low-income households sacrifice food expenditure in response to increased heating fuel costs. To address this public health issue, the Federal Government created the Low-Income Home Energy Assistance Program (LIHEAP). A correlative relationship between food and fuel expenditure exists. However, there is no theoretical reason why expenditure choices within these two categories should be directly linked. Therefore, the issue is an empirical question, one which has never before been evaluated. Using data from the Consumer Expenditure Survey (CES), LIHEAP’s impact on low-income households’ expenditures is assessed. By evaluating the effect LIHEAP has on low-income households, this research aims to test the “Heat or Eat” dilemma and the appropriateness of resulting political response.